Minnesota AG Extends Debt Collection Agreement with State Hospitals

The Attorney General of Minnesota has extended a regulatory agreement put in place with nonprofit hospitals operating in the state, as well as a for-profit hospital for the first time, that protects patients from “abusive, harassing, and deceptive practices when hospitals seek to collect medical debt.”

Along with including all 128 nonprofit hospitals operating in Minnesota, the agreement — for the first time — also includes one of the two for-profit hospitals operating in the state. The agreement will expire on July 1, 2027.

Under the agreement, hospitals are required to develop policies for assessing patients’ ability to repay debts and provide free healthcare to patients who qualify. The boards of directors at hospitals are also required to put policies in place to adopt a zero-tolerance stance on “abusive, harassing, oppressive, false, deceptive, or misleading language” when collecting on medical debts.

Debt collectors hired by hospitals must also follow the terms of the agreement, according to the Attorney General. Collectors are also barred from having “blanket authority” to take legal action when trying to collect on unpaid debts. Hospitals and debt collectors are prohibited from reporting unpaid debts to credit reporting agencies. Before pursuing litigation to recover unpaid debts or placing an account with a collection agency hospitals are required to offer patients “reasonable” payment plan options, and as long as the patient is making payments, the debt may not be referred to a third-party collection agency.

“It’s my job to keep Minnesotans safe from abusive billing and debt collection that can rob them of dignity and respect. That’s all the more important at a time of rising inflation and skyrocketing medical bills that make it tough to afford your life,” said Minnesota Attorney General Keith Ellison, in a statement. “The Hospital Agreement is now a tradition of the Attorney General’s Office that Minnesotans count on to protect them from abusive medical billing and debt collection and help them afford their lives. As long as I’m attorney general, I will keep enforcing it.”

The state has taken enforcement actions` against hospitals over what the AG deemed to be unfair debt collection practices.

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